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The Sustainable Development Goals as Business Opportunities

OECD Development Co-operation Report 2016 The face of development has changed, with diverse stakeholders involved – and implicated – in what are more and more seen as global and interlinked concerns. At the same time, there is an urgent need to mobilise unprecedented resources to achieve the ambitious Sustainable Development Goals (SDGs). The private sector can be a powerful promotor of sustainable development. Companies provide jobs, infrastructure, innovation and social services, among others. Increasingly, investments in developing countries – even in the least developed countries – are seen as business opportunities, despite the risks involved. The public sector can leverage the private sector contribution, helping to manage risk and providing insights into effective policy and practice. Yet in order to set the right incentives, a better understanding is needed of the enabling factors, as well as the constraints, for businesses and investors interested in addressing sustainable development challenges. The Development […]

OECD Development Co-operation Report 2016

The face of development has changed, with diverse stakeholders involved – and implicated – in what are more and more seen as global and interlinked concerns. At the same time, there is an urgent need to mobilise unprecedented resources to achieve the ambitious Sustainable Development Goals (SDGs). The private sector can be a powerful promotor of sustainable development. Companies provide jobs, infrastructure, innovation and social services, among others. Increasingly, investments in developing countries – even in the least developed countries – are seen as business opportunities, despite the risks involved. The public sector can leverage the private sector contribution, helping to manage risk and providing insights into effective policy and practice. Yet in order to set the right incentives, a better understanding is needed of the enabling factors, as well as the constraints, for businesses and investors interested in addressing sustainable development challenges.

The Development Co-operation Report 2016 explores the potential and challenges of investing in developing countries, in particular through social impact investment, blended finance and foreign direct investment. The report provides guidance on responsible business conduct and outlines the challenges in mobilising and measuring private finance to achieve the SDGs. Throughout the report, practical examples illustrate how business is already promoting sustainable development and inclusive growth in developing countries. Part II of the report showcases the profiles and performance of development co-operation providers, and presents DAC statistics on official and private resource flows.

With the adoption of the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs), the world now has the most ambitious, diverse and universal development roadmap in history. To meet the challenges they represent, the global community needs to move well beyond the approximately USD 135 billion provided annually as official development assistance (ODA). Investment needs for the SDGs in developing countries are estimated to be in the order of USD 3.3 to 4.5 trillion per year. Taking action to limit the global temperature increase to 1.5°C above pre‑industrial levels will require some USD 100 billion every year until 2020 from developed countries alone. At the same time, the new goals make it clear that the challenges of sustainable development are no longer merely a question of what is happening in poor countries – they are challenges for us all. To tackle these global and interlinked concerns, a diverse array of stakeholders will need to join forces – with the private sector taking a pivotal position.

Investment in sustainable development is smart investment

The business case for the SDGs is strong. This Development Co‑operation Report 2016 makes it clear that investing in sustainable development is smart investment. Companies that introduce sustainability into their business models are profitable and successful, with positive returns on capital in terms of reduced risk, diversification of markets and portfolios, increased revenue, reduced costs and improved value of products. Increasingly, investments in developing countries – and even in the least developed countries – are seen as business opportunities, despite the risks involved. On the other hand, companies provide jobs, infrastructure, innovation and social services, among others. This report explores five pathways for realising the enormous potential of the private sector as a partner for delivering on the SDGs, providing the quantity and quality of investment needed to support sustainable development.

Five pathways to the Sustainable Development Goals

1. Foreign direct investment is by far the greatest source of international capital flows to developing countries and is considered one of the most development‑friendly sources of private investment. It can create jobs, boost productive capacity, enable local firms to access new international markets and bring with it transfers of technology that can have positive long‑term effects. Many are expecting these flows to play a major role in filling the SDG financing gap. According to the United Nations Conference on Trade and Development (UNCTAD), a concerted effort by the international community could help to quadruple foreign direct investment by 2030, especially in structurally weak countries. There is, however, some cause for concern: global capital flows have started to decelerate, while economic vulnerabilities are growing. Chapter 2 warns that a slowdown, or even reversal, in foreign direct investment could have serious negative ramifications for both developing and international investment markets. Framing development strategies around the complementary and mutually reinforcing qualities of private investment and development co‑operation can help to offset the cyclic, changing nature of foreign direct investment trends.

2. Blended finance – using public funds strategically to provide, for instance, de‑risking instruments for private investors – can dramatically improve the scale of investment in development. Blended finance offers huge, largely untapped potential for public, philanthropic and private actors to work together to dramatically improve the scale of investment in developing countries. Its potential lies in its ability to remove bottlenecks that prevent private investors from targeting sectors and countries that urgently need additional investment. To accelerate social and economic progress towards the Sustainable Development Goals, blended finance needs to be scaled up, but in a systematic way that avoids certain risks. Chapter 3 takes a close look at the use of development and philanthropic finance to unlock resources through blending mechanisms that have the potential to transform economies, societies and lives. It notes that while the concept of blending public and private finance in the context of development co‑operation is nothing new, it has played a marginal role so far.

3. Chapter 4 of this report describes work underway to monitor and measure the mobilisation effect of public sector interventions on private investment. This is expected to be an important element of the new “total official support for sustainable development” (TOSSD) framework, which will provide important information about financing strategies and best practices, helping to attract development finance to support the SDGs. A recent OECD survey has confirmed the feasibility of collecting and measuring data on the direct mobilisation effect of guarantees, syndicated loans and shares in collective investment vehicles; work is underway to develop similar methodologies for other financial instruments. Much work still remains to be done, however, in particular to find ways of measuring the indirect – or “catalytic” – effect of public interventions on the achievement of the global goals and in tackling climate change. The OECD is co‑ordinating its efforts with work underway in other fora to ensure coherence.

4. If development is to be truly sustainable and inclusive it must benefit all citizens – in particular the poorest, most marginalised and vulnerable. Social impact investment has evolved over the past decade as an innovative approach to increasing the benefits of business for the world’s poorest and most marginalised populations. Enterprises that generate measurable social as well as financial returns can bring effectiveness, innovation, accountability and scale to development efforts. Public funds can be used to strengthen and promote this type of investment by sharing risks, and also by supporting a sound business environment, particularly in the least developed countries and in countries emerging from conflict. These new business models can complement existing ones, especially in areas not traditionally popular with business – but essential to the poor – such as education, health and social services.

5. For business to do good while doing no harm, the private sector must be held to the same international transparency and accountability standards as all other actors. Chapter 6 looks at the principles and standards of responsible business conduct and how following them can give responsible businesses an advantage that benefits their bottom lines, while at the same time producing positive results for people and the planet. Business and government have complementary roles to play in implementing, promoting and enabling responsible business conduct. The OECD Guidelines for Multinational Enterprises help to optimise their contributions, supporting the development of responsible and accountable business practice to ensure that investment quantity is matched by business quality to produce social, economic and environmental benefits.

This report provides examples of how the OECD is stimulating dialogue and creating opportunities for co‑operation among the many stakeholders involved in sustainable development. It also presents practical cases that illustrate how businesses are already working to promote sustainable development and inclusive growth in developing countries. In this era hallmarked by globalisation, rapid technological advancement and competition for precious resources, it is important to remember that business thrives when the world thrives.

Read the full book on: 10.1787/dcr-2016-en

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OECD Development Co-operation Report 2015

Making Partnerships Effective Coalitions for Action With the adoption of the Sustainable Development Goals, the question of how to finance, implement and monitor these goals moves to the centre of the debate. Today, international development co-operation takes place in an increasingly complex environment, with an ever growing number of actors, policies and instruments involved. This complexity raises the stakes for achieving the goals, but also opens up new opportunities. Although governments will remain the key actors in the implementation of the new post-2015 goals, the role of non-state actors such as civil society, foundations and business is growing. Their association through effective partnerships will be key to the implementation of the post-2015 agenda. The Development Co-operation Report 2015 explores the potential of networks and partnerships to create incentives for responsible action, as well as innovative, fit-for-purpose ways of co-ordinating the activities of diverse stakeholders. The report – Making Partnerships Effective […]

Making Partnerships Effective Coalitions for Action

With the adoption of the Sustainable Development Goals, the question of how to finance, implement and monitor these goals moves to the centre of the debate. Today, international development co-operation takes place in an increasingly complex environment, with an ever growing number of actors, policies and instruments involved. This complexity raises the stakes for achieving the goals, but also opens up new opportunities. Although governments will remain the key actors in the implementation of the new post-2015 goals, the role of non-state actors such as civil society, foundations and business is growing. Their association through effective partnerships will be key to the implementation of the post-2015 agenda.

The Development Co-operation Report 2015 explores the potential of networks and partnerships to create incentives for responsible action, as well as innovative, fit-for-purpose ways of co-ordinating the activities of diverse stakeholders. The report – Making Partnerships Effective Coalitions for Action – looks at a number of existing partnerships working in diverse sectors, countries and regions to draw lessons and provide practical guidance, proposing ten success factors for post-2015 partnerships. A number of leading policy makers and politicians share their insights and views.

Summary [German version]

The development efforts made by the international community over the past 60 years have had measurable impact on reducing poverty, improving human health and tackling other pressing challenges. Yet fragmented initiatives, conflicting priorities and uncoordinated approaches continue to hold back progress.

At the same time, in our increasingly interconnected and globalised world, national boundaries are blurring; the notion of state sovereignty that underpinned traditional forms of international co‑operation is increasingly challenged.

The need for co‑ordinated action is more urgent than ever. The United Nations has led the formulation of 17 ambitious, universal and far‑reaching Sustainable Development Goals to be achieved by 2030. Improved and expanded international co‑operation, within a system of global governance underpinned by appropriate mechanisms of mutual accountability, will be essential to achieve these goals.

Partnerships are powerful drivers of development

While most agree that partnerships are crucial for driving collective action to achieve the Sustainable Development Goals, the term “partnerships” encompasses diverse approaches, structures and purposes, making it difficult – if not impossible – to generalise about them.

At the same time, while universal in nature and applicable to all countries, the Sustainable Development Goals are founded on the respect for diversity – of contexts, needs, capabilities, policies and priorities, among others. To be effective, it is essential that partnerships addressing these global goals be driven by the priorities of the individual countries.

Within this context, three guiding principles can help to realise the full potential of partnerships post‑2015:

1 ‑ Accountable action . Accountability means being responsible for one’s action or inaction and, in the latter case, accepting potential sanctions for lack of compliance with commitments. Although accountability provided by governments will remain at the core of post‑2015 action, today’s development partnerships bring together a range of stakeholders: national governments, parliaments, civil society, philanthropies, multilateral organisations, businesses and many others – not least among them the communities affected by development initiatives. While drawing on common development effectiveness principles, many of today’s accountability frameworks are founded on the recognition that different stakeholders may approach a common development agenda in different ways. This recognition builds trust andmutual respect, two characteristics that are at the core of accountability. So how do we manage accountability within the increasing complexity of international co‑operation? New ways of holding each other to account are needed, in combination with measurable commitments and standards that are continually reviewed and updated to keep them relevant and responsive, and to maintain shared commitment and political momentum. It is also fundamental to ensure that all partners are represented within governance mechanisms and that all voices are heard.

2 ‑ Co‑ordinated and effective action . With the growing diversity of partners involved in development co‑operation, it is more important than ever to avoid duplication of effort and fragmentation – problems that have long challenged the effectiveness of development co‑operation. While effective action post‑2015 can be greatly facilitated by focusing partnerships on specific issues or sectors – such as health, education and sustainable energy – this does not mean that more and bigger partnerships are the best solution; experience demonstrates that this can actually hinder rather than promote progress. Streamlined partnerships – integrating existing actors and structures – reduce fragmented or overlapping action and ease the reporting and administrative burden on developing countries, thereby improving both delivery and impact. Partnerships – including between the public and private sectors – can also help take solutions to scale, expanding the reach of development solutions to large numbers of beneficiaries in ways that individual governments, businesses or philanthropies are usually not capable of doing on their own. Finally – but by no means least important – strong, committed leadership gives partnerships the momentum they need to tackle complex development challenges, stay on course and mobilise the human and financial resources required to get the job done.

3 ‑ Experience‑based action . The reform of global development co‑operation to meet today’s development challenges calls for changes in behaviour and mind‑sets. Dialogue and learning from experience are essential to produce these changes. The 11 case stories included in this report represent diverse partnership experiences and approaches, yet there is at least one thing all of them share: an emphasis on the importance of learning from experience, knowledge sharing and the distillation of lessons and good practice. South‑South co‑operation is an important vehicle for knowledge sharing, enabling countries to apply lessons taken directly from the experience of others to inform their own policies and programmes. Accountability mechanisms contribute to learning from experience, enhancing the quality of development co‑operation to improve its impact and relevance. These mechanisms range from peer reviews that focus on how development co‑operation is framed, managed and delivered, to monitoring, reporting and evaluation cycles that are used to support continuing adaptation.

Post‑2015 partnerships will bring new and evolving roles

Achieving the Sustainable Development Goals will require strong involvement by many actors, including:

the private sector, for job creation, technology development and investment
civil society for holding development co‑operation partners to account, pushing for action on national and global commitments and scrutiny to ensure productive and accountable investment of public resources.

This implies a changing role for governments, which have traditionally been seen as the main providers of finance for development.

A policy framework for post‑2015 partnerships

The Development Co‑operation Report 2015 explores the role of partnerships in providing the necessary balance of sovereignty and subsidiarity, of inclusiveness and differentiation, of coherence and specialisation for delivering the Sustainable Development Goals. Drawing lessons from experience, it proposes ten success factors that provide an implementation and monitoring framework for making partnerships effective coalitions for action:

1. Secure high‑level leadership.
2. Ensure partnerships are country‑led and context‑specific.
3. Avoid duplication of effort and fragmentation.
4. Make governance inclusive and transparent.
5. Apply the right type of partnership model for the challenge.
6. Agree on principles, targets, implementation plans and enforcement mechanisms.
7. Clarify roles and responsibilities.
8. Maintain a clear focus on results.
9. Measure and monitor progress towards goals and targets.
10. Mobilise the required financial resources and use them effectively.

Get the Report at
http://www.oecd-ilibrary.org/development/development-co-operation-report-2015_dcr-2015-en

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Key indicators of OECD and G20 countries


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Development aid stable in 2014 but flows to poorest countries still falling

Paris 08/04/2015 (OECD) Development aid flows were stable in 2014, after hitting an all-time high in 2013, but aid to the poorest countries continued to fall, according to official data collected by the OECD Development Assistance Committee (DAC).

Net official development assistance (ODA) from DAC members totalled USD 135.2 billion, level with a record USD 135.1 billion in 2013, though marking a 0.5% decline in real terms. Net ODA as a share of gross national income was 0.29%, also on a par with 2013. ODA has increased by 66% in real terms since 2000, when the Millennium Development Goals were agreed.

Bilateral aid to the least-developed countries fell by 16% in real terms to USD 25 billion, according to provisional data. Much of this drop is explained by exceptionally high debt relief for Myanmar in 2013, but even excluding debt relief ODA to the poorest countries fell by 8%. Bilateral aid is channelled directly by donors to partner countries and equates to roughly two-thirds of total ODA.

“I am encouraged to see that development aid remains at a historic high at a time when donor countries are still emerging from the toughest economic crisis of our lifetime,” said OECD Secretary-General Angel Gurría. “Our challenge as we finalise post-2015 development goals this year will be to find ways to get more of this aid to the countries that need it most and to ensure we are getting as much as we can out of every dollar spent.”

A survey of aid donor countries’ spending plans through 2018 points to a dip in country-programmable aid – aid that is planned in advance for country programmes – in 2014 but with programmed increases starting in 2015.

The survey indicates that country-level aid to the poorest countries should recover over the next few years after several years of declines, in line with a pledge by DAC members in December 2014 to reverse the fall in aid to countries most in need.

“ODA remains crucial for the poorest countries and we must reverse the trend of declining aid to the least-developed countries. OECD ministers recently committed to provide more development assistance to the countries most in need. Now we must make sure we deliver on that commitment,” said DAC Chair Erik Solheim.

Five of the DAC’s 28 member countries – Denmark, Luxembourg, Norway, Sweden and the UK – continued to exceed the United Nations target of keeping ODA at 0.7% of GNI.

Thirteen countries reported a rise in net ODA, with the biggest increases in Finland, Germany, Sweden and Switzerland. Fifteen DAC members reported lower ODA, with the biggest declines in Australia, Canada, France, Japan, Poland, Portugal and Spain.

Looking in addition at several non-DAC members who also reported their aid flows to the OECD body, the United Arab Emirates posted the highest ODA/GNI ratio in 2014 at 1.17%.

ODA makes up more than two thirds of external finance for least-developed countries. The OECD will call at the International Conference on Financing for Development in Addis Ababa in July for more of this money to be used as a lever to generate private investment and domestic tax revenues in poor countries. OECD work on combatting tax avoidance and illicit financial flows out of least-developed countries also aims to reduce dependence on aid.

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Wikiprogress is the Platform on Measuring the Progress of Societies

Karsten Weitzenegger Consulting uses Wikiprogress, This is a global platform for you to gather, share and create information about measuring the progress of society. www.wikiprogress.org Wikiprogress is a global platform for sharing information in order to evaluate social, environmental and economic progress. It is open to all members and communities for contribution – students and researchers, civil society organisations, governmental and intergovernmental organisations, multilateral institutions, businesses, statistical offices, community organisations and individuals – to anyone who has an interest in the concept of “progress”. Wikiprogress was launched in 2009 at the OECD World Forum on Statistics, Knowledge and Policy in Busan, Korea. Explore Categories Child Well-being Wikiprogress America Latina Governance and Civic Engagement Networks and Partners Society and Culture Countries Health Online Consultations Subjective Well-being Data and Statistics Housing Personal Security Sustainable Development Education and Skills Human Well-being Post-2015 Transport and Access to Services Environment Income and Wealth Progress Initiatives […]

Karsten Weitzenegger Consulting uses Wikiprogress, This is a global platform for you to gather, share and create information about measuring the progress of society. www.wikiprogress.org

Wikiprogress is a global platform for sharing information in order to evaluate social, environmental and economic progress. It is open to all members and communities for contribution – students and researchers, civil society organisations, governmental and intergovernmental organisations, multilateral institutions, businesses, statistical offices, community organisations and individuals – to anyone who has an interest in the concept of “progress”. Wikiprogress was launched in 2009 at the OECD World Forum on Statistics, Knowledge and Policy in Busan, Korea.

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Perspectives on Global Development 2014: OECD sees productivity as key

Boosting productivity key for developing economies to close income gap with advanced countries, says OECD Development Centre

Income levels in most developing and emerging countries will not catch up with advanced economies for many decades without efforts to boost productivity, according to a new report by the OECD Development Centre.

Developing economies continue to grow faster than more advanced countries. Non-OECD countries’ share in world GDP surpassed that of OECD countries in 2010. Since its first edition in 2010, the annual Perspectives on Global Development has investigated the trends in “shifting wealth”, the increasing economic weight of developing countries in the world economy. “Shifting wealth” has received a boost through the rise of China, which has also led to positive spillover effects on developing economies that supply China’s demand for resource-based products and intermediates. However, even at their higher rates of growth since 2000, the per capita incomes in developing countries – including many middle-income countries – will not reach the levels of developed countries by 2050. Boosting productivity growth in middle-income countries could stem this trend and is the focus of this report. At the same time, this growth needs to be inclusive so that a real convergence in living standards can take place.

Perspectives on Global Development 2014 shows that while China, Kazakhstan and Panama are on track to reach OECD levels of average income by 2050, a number of middle-income countries – including Brazil, Colombia, Hungary, Mexico and South Africa – will take much longer at current growth rates.

Labour productivity in most developing and emerging countries is well below half the level of OECD countries, the report shows. Diversification into higher value-added areas in agriculture, manufacturing and services along with economic reforms and a greater focus on innovation could help remedy this.

“Many of the upper middle-income countries we expected would be catching up with advanced economies by the middle of the century will not do so at today’s growth rates,” said OECD Secretary-General Angel Gurría, launching the report at the Organisation’s 6th Global Forum on Development. “Boosting productivity would help enhance growth and narrow the gap in living standards relative to the advanced economies more quickly.”

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Source: OECD.

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African Economic Outlook 2014: Empowering people through investments in skills and technology needed to boost development

Empowering people through investments in skills and technology needed to boost development

By participating more effectively in the global production of goods and services, Africa can transform its economy and achieve a development breakthrough, according to the latest African Economic Outlook, released at the African Development Bank Group’s Annual Meetings.

Produced annually by the African Development Bank (AfDB), the OECD Development Centre and the United Nations Development Programme (UNDP), this year’s report shows that Africa has weathered internal and external shocks and is poised to achieve healthy economic growth rates.

The continent’s growth is projected to accelerate to 4.8 percent in 2014 and 5 to 6 percent in 2015, levels which have not been seen since the global economic crisis of 2009. Africa’s economic growth is more broad-based, argues the report, driven by domestic demand, infrastructure and increased continental trade in manufactured goods.

“In order to sustain the economic growth and ensure that it creates opportunities for all, African countries should continue to rebuild shock absorbers and exercise prudent macro management. Any slackening on macro management will undermine future economic growth,” said Mthuli Ncube, Chief Economist and Vice-President of the African Development Bank.

“In the medium- to long-term, the opportunity for participating in global value chains, should be viewed as part of the strategy for achieving strong, sustained and inclusive growth,” he added.

The report argues that more effective participation in regional and global value chains – the range of activities in different countries that bring a product from conception to delivery to the consumer – could serve as a springboard for Africa in economic diversification, domestic resource mobilisation and investments in critical infrastructure. In order to do so, however, the continent needs to avoid getting stuck in low value-added activities.

For instance, Africa’s exports to the rest of the world grew faster than those of any other region in 2012, but they remain dominated by primary commodities and accounted for only 3.5 percent of world merchandise exports in 2012.

Avoiding that trap involves investing in new and more productive sectors, building skills, creating jobs and acquiring new technology, knowledge and market information. These interventions require sound public policies, as well as entrepreneurs that are willing and capable of helping achieve these gains.

The report uses the example of South Africa, which achieved a remarkable turnaround in its automotive industry by removing obstacles and providing incentives for component producers and assembly lines. It also shows that the development of agribusiness value chains in countries such as Ghana, Kenya and Ethiopia has contributed to economic growth and job
creation.

“African economies have a great potential to build on their demographic dynamism, rapid urbanisation and natural-resources assets. The challenge now for many of them is to ensure that greater insertion into global value chains is achieved and has a positive impact on people’s lives,” said Mario Pezzini, Director of the OECD Development Centre.
“Public policies need to be articulated in a targeted strategy.

Get more from http://www.africaneconomicoutlook.org/en/

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OECD: Aid to developing countries rebounds in 2013 to reach an all-time high

Paris (OECD) – Development aid rose by 6.1% in real terms in 2013 to reach the highest level ever recorded, despite continued pressure on budgets in OECD countries since the global economic crisis. Donors provided a total of USD 134.8 billion in net official development assistance (ODA), marking a rebound after two years of falling volumes, as a number of governments stepped up their spending on foreign aid.

An annual survey of donor spending plans by the OECD Development Assistance Committee (DAC) indicated that aid levels could increase again in 2014 and stabilise thereafter. However, a trend of a falling share of aid going to the neediest sub-Saharan African countries looks likely to continue.

“It is heartening to see governments increasing their development aid budgets again, despite the financial constraints they are currently facing,” said OECD Secretary-General Angel Gurría. “However, assistance to some of the neediest countries continues to fall, which is a serious concern. We will need to address this issue when the Global Partnership for Effective Development Co-operation meets in Mexico next week, as well as the broader challenge of how to make the most of ODA in a growing pool of resources for development finance.” 

Key aid figures in 2013

In all, 17 of the DAC’s 28 member countries increased their ODA in 2013, while 11 reported a decrease. Net ODA from DAC countries stood at 0.3% of gross national income (GNI.) Five countries met a longstanding UN target for an ODA/GNI ratio of 0.7%.

 

The United Kingdom increased its ODA by 27.8% to hit the 0.7% target for the first time. The United Arab Emirates posted the highest ODA/GNI ratio, 1.25%, after providing exceptional support to Egypt.

Aid to developing countries grew steadily from 1997 to a first peak in 2010. It fell in 2011 and 2012 as many governments took austerity measures and trimmed aid budgets. The rebound in aid budgets in 2013 meant that even excluding the five countries that joined the DAC in 2013 (Czech Republic, Iceland, Poland, Slovak Republic and Slovenia), 2013 DAC ODA was still at an all-time high.

Shifting aid allocations

Within bilateral net ODA, non-grant disbursements (including equity acquisitions) rose by about 33% in real terms from 2012. Total grants rose 7.7% in real terms; excluding debt forgiveness grants, they rose 3.5%. Net aid for core bilateral projects (excluding debt relief grants and humanitarian aid) rose by nearly 2.3% in real terms and core contributions to multilateral institutions by 6.9% (see Chart 2).

Bilateral aid to sub-Saharan Africa was USD 26.2 billion, a decrease of 4.0% in real terms from 2012.  Aid to the African continent fell by 5.6% to USD 28.9 billion. Excluding debt relief, which was high in 2012 due to assistance to Côte d’Ivoire, net aid in real terms rose by 1.2% to sub-Saharan Africa but fell by 0.9% to the continent as a whole.

Bilateral net ODA to the Least Developed Countries (LDCs) rose by 12.3% in real terms to about USD 30 billion. However, there was exceptional debt relief for Myanmar in 2013.  Details on the impact of debt relief on aid flows to LDCs will be available later this year.

Donor performance

The largest donors by volume were the United States, the United Kingdom, Germany, Japan and France.  Denmark, Luxembourg, Norway and Sweden continued to exceed the 0.7% ODA/GNI target and the UK met it for the first time. The Netherlands fell below 0.7% for the first time since 1974.

Net ODA rose in 17 countries, with the largest increases recorded in Iceland, Italy, Japan, Norway and the UK. It fell in 11 countries, with the biggest decreases in Canada, France and Portugal.

The G7 countries provided 70% of total net DAC ODA in 2013, and the DAC-EU countries 52%.

The US remained the largest donor by volume with net ODA flows of USD 31.5 billion, an increase of 1.3% in real terms from 2012.  US ODA as a share of GNI was 0.19%.  Most of the increase was due to humanitarian aid and support for fighting HIV/AIDS.  By contrast US net bilateral aid to LDCs fell by 11.7% in real terms to USD 8.4 billion due in particular to reduced disbursements to Afghanistan.  Net ODA disbursements to sub-Saharan Africa fell by 2.9% to USD 8.7 billion.

ODA from the 19 EU countries that are DAC members was USD 70.7 billion, a rise of 5.2% in real terms from 2012, and 0.42% of their combined GNI. ODA rose or fell in DAC-EU countries as follows:

  • Austria (+0.7%)
  • Belgium (-6.1%): due to lower levels of debt relief in 2013 compared to 2012
  • Czech Republic (-4.7%): due to a decrease in bilateral aid to Afghanistan
  • Denmark (+3.8%): as it increased its bilateral aid
  • Finland (+3.5%): reflecting an overall scaling up of its aid
  • France (-9.8%): due to lower levels of loans disbursements and debt relief compared to 2012
  • Germany (+3.0%): due to a rise in bilateral lending and higher contributions to international  organisations
  • Greece (-7.7%): due to austerity measures
  • Ireland (-1.9%): despite continued budgetary pressures, Ireland has largely stabilised allocations to ODA, with 2013 volumes marginally decreasing on the 2012 levels
  • Italy (+13.4%): the Italian government had made a firm commitment to increase its ODA allocations to 0.16% of GNI in 2013 and reached this target 
  • Luxembourg (+1.2%)
  • Netherlands (-6.2%): its ODA/GNI ratio fell below 0.7% due to overall aid budget cuts; the Netherlands says it remains committed to the 0.7% target and to innovative, results-oriented support mechanisms and partnerships to increase the leverage of its development efforts
  • Poland (+8.6%): due to increased contributions to EU Institutions
  • Portugal (-20.4%): due to financial constraints leading to budget cuts
  • Slovak Republic (+2.4%)
  • Slovenia (-0.6%)
  • Spain (+3.7%):due to debt relief operations in sub-Saharan Africa
  • Sweden (+6.3%): due to increases in its bilateral aid and aid to international organisations
  • UK (+27.8%): as it put into place firm budget allocations to meet the 0.7% ODA/GNI target.

In 2013, net ODA by the 28 EU member states was USD 71.2 billion, or 0.41% of their combined GNI. Net disbursements by EU Institutions to developing countries and multilateral organisations were USD 15.9 billion, a fall of 13.1% from 2012, due especially to a lower volume of concessional loans.

Net ODA rose or fell in other DAC countries as follows:

  • Australia (-4.5%): as it delayed expenditure due to reprioritisation of its aid program to focus on the Indo-Pacific region. Australia’s aid remains stable and on track for an estimated expenditure of A$ 5 billion in 2013-14.
  • Canada (-11.4%): due to exceptional payments made in 2012 for climate change and debt relief and to budget cuts affecting 2013
  • Iceland (+27.4%): as it is increasing its aid programme;
  • Japan (+36.6%): due to increases in debt forgiveness and bilateral lending
  • Korea (+4.8%): due to scaling up aid overall
  • New Zealand (-1.0%): due to an increasing aid programme being offset by inflation
  • Norway (+16.4%): due to planned growth in the development cooperation budget, together with an increase in disbursements to Brazil
  • Switzerland (+3.4%): reflecting the overall scaling up of its aid to reach 0.5% of GNI by 2015.

Other donor countries reported preliminary ODA figures as follows: 

  • Estonia (+22.3%):  due to increases in humanitarian  aid and contributions to EU Institutions
  • Hungary (-2.1%)
  • Israel (-6.2%)
  • Latvia (+12.2%)
  • Russia (+26.4%): due to an increase in bilateral aid
  • Turkey (+29.7%): continuing the significant expansion of its development co-operation programme in recent years;  the large increase in 2013 is due in part to the crisis in Syria
  • UAE (+375.5%): due to exceptional measures to address financial and infrastructure needs in Egypt; its ODA/GNI ratio rose to 1.25%, the largest reported share of any country in 2013.

In 2013, DAC countries’ gross ODA (i.e. without deducting loan repayments) was USD 151.2 billion, an increase of 9.5% in real terms from 2012. Within bilateral gross ODA, non-grant financial instruments rose by 27.3% in real terms, representing nearly USD 18 billion. The largest donors on a gross basis were the US, Japan, the UK, Germany and France (see Table 2).

Further outlook

The 2014 DAC Survey on Donors’ Forward Spending Plans gives estimates of future aid allocations for all DAC members, major non-DAC and multilateral donors up to 2017, based on developing countries’ gross receipts of Country Programmable Aid [1].  CPA thus differs from ODA, especially by counting multilateral agencies’ outflows rather than inflows.  The CPA increase predicted last year for 2013 did translate into increased overall ODA, and affected all income groups.  Global CPA rose by 10.2% in real terms in 2013 to USD 103.1 billion, but with widely differing increases from DAC members (+2.0%), multilateral agencies (+17.6%), and non-DAC donors (+123.7%). 

CPA is projected to increase slightly by 2.4% in real terms in 2014, due to continued increases by a few DAC donors and multilateral agencies, and is expected to remain stable beyond 2014. 

The survey suggests a continued focus in the medium term on middle-income countries – many with large populations in extreme poverty – in particular countries such as Brazil, China, Chile, Georgia, India, Mexico, Pakistan, Sri Lanka, and Uzbekistan, where programmed increases above 5% are expected up to 2017. It is most likely that aid to these countries will be in the form of soft loans.

By contrast, the survey suggests a continuation of the worrying trend of declines in programmed aid to LDCs and low-income countries, in particular in Africa. CPA to LDCs and LICs is set to decrease by 5%, reflecting reduced access to grant resources on which these countries are highly dependent. Some Asian countries may see increases, however, so that by 2017 overall allocations to Asia are expected to equal those towards Africa.

Some Asian countries may see increases, however, so that by 2017 overall allocations to Asia are expected to equal those towards Africa.

Detailed survey data will be published on the OECD website for donors participating in data disclosure policy.

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Evaluating Development Activities – 12 Lessons from the OECD DAC

As development co-operation faces ever increasing pressures to demonstrate results, donors and partner governments need credible, timely evidence to inform their programmes and improve performance. Evaluation has a critical role to play in providing such evidence. New methodologies and ways of working are being developed to better understand what works, why and under what circumstances and improve mutual accountability.

The 12 Lessons on Evaluating Development Activities are aimed at strengthening evaluation for better learning and decision-making and will be a particular interest to countries and agencies working to strengthen their development evaluation activities.

CONTENTS

The strategic framework for learning and accountability
Lesson 1: Base development policy decisions on evidence
Lesson 2: Make learning part of the culture of development co-operation
Lesson 3: Define a clear role for evaluation

Delivering evaluations effectively
Lesson 4: Match ambitions with adequate resources
Lesson 5: Strengthen programme design and management systems
Lesson 6: Ask the right questions and be realistic about expected results
Lesson 7: Choose the right evaluation tools
Lesson 8: Work together
Lesson 9: Help strengthen partner country capacities and use them

Strengthening the culture of learning
Lesson 10: Act on evaluation findings
Lesson 11: Communicate evaluation results effectively
Lesson 12: Evaluate the evaluators
References and further reading

Read the full report at http://www.oecd.org/dac/peer-reviews

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Transforming Education into Better Jobs and Better Lives

This blog post also appears in NORRAG NEWS 48, 2012: The Year of Global Reports on TVET, Skills & Jobs Consensus or diversity? (April 2013), available free online at www.norrag.org